Bank of New York May Pull Plug
On Its $23 Billion Bid for Mellon

NEW YORK --
Bank of New York Co.
, its effort to coerce
Mellon Bank Corp.
into merger talks failing to catch fire, may be quietly preparing to pull the plug on its $23 billion unsolicited offer.

Publicly, officials of the New York bank say they have no intention of withdrawing the proposal. "In no way are we changing our strategy at this point," Bank of New York spokesman Paul Leyden said Thursday.

But at two separate meetings with investors this week -- one hosted by the Union Bank of Switzerland, and the other by Keefe Bruyette & Woods Inc., a New York investment bank -- Thomas A. Renyi, Bank of New York's chairman, said the bank's offer would remain on the table for weeks, not months. And in the meeting with Keefe Bruyette clients, Mr. Renyi went a step further, suggesting he thought the bid had a "50-50 chance, at best" of succeeding, according to Keefe Bruyette's director of research, David Berry, who hosted the gathering.

Odds Are Denied

"In my heart, I think he thinks the odds are worse than that, but how can he say that?" Mr. Berry asked. The analyst's conclusion: Bank of New York probably will end its bid "within a few weeks."

Messrs. Renyi and Van Saun were traveling to meet with investors Thursday, and were unavailable for comment, Mr. Leyden said. For his part, the Bank of New York spokesman said that while he wasn't present at the Keefe Bruyette meeting, he hadn't heard Mr. Renyi place any odds on the bid's prospects at any other time.

"This is just too important a transaction to be thinking of it in terms of odds," Mr. Leyden said, adding: "We have not set a time limit on it and we're certainly not setting one now."

Investors aren't behaving as though they think the banks are about to merge. After narrowing somewhat in recent days, the "spread"-- or difference between the face value of the offer and Mellon's stock price -- widened again Thursday, indicating that Wall Street may be losing faith in the prospects for a deal.

Though Bank of New York's shares climbed $1.8125, to $59.0625, giving its offer a current value of $82.6875 per Mellon share, the Pittsburgh bank's shares lost 87.50 cents, to close at $72, in composite trading on the New York Stock Exchange.

Mellon Standing Firm

While several big Mellon shareholders have said publicly they think Bank of New York's offer is a good one, there is little evidence Mellon's management is about to cave in to the pressure.

A Mellon spokeswoman declined to comment Thursday, but earlier this week, the Pittsburgh bank called its rival's offer "an ill-conceived scheme," and accused Bank of New York of mounting a "high-pressure information campaign" that is "wasteful and counterproductive."

Mellon executives, who like their New York counterparts have been lobbying shareholders all week, laid out their case to a gathering of investors and analysts at New York's tony Metropolitan Club last night.